Decision time about my car - these are my options

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daveyjp said:

The three months 'free' is merely the new way of offering a dealer incentive for a PCP agreement and ensuring they maintain profit on the finance.

Previously the incentve would be a few thousand as a lump sum, but MSE cash buyers were buying through brokers to get a hefty discount, getting the PCP incentive on top, then paying the loan off in full after a couple of weeks.

As others said three months of no payments possibly means extra interest paid, but we need figures to see if that is the case.

Why don't they do it at the end?

You get a £1000 manufacturer contribution, we will pay the final 3 months for you/refund the payments when you make them.

VT the car- we don't have to pay

Settle the finance early- we don't have to pay.

Win win for the manufacturer surely

Grumpy_chap

No, because they know they have to discount the car to sell.  This is a trick that allows them to show the sale at list.

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Grumpy_chap said:

No, because they know they have to discount the car to sell.  This is a trick that allows them to show the sale at list.

If you are replying to me- "why don't they give the incentive at the end" then surely the whole point is the sale would be at list, the financed amount would be list, the "cash back"/"bonus"/"incentive"/"discount" is a perk for running the finance to the point that the finance co. is in profit to more than the "discount" amount.

A creative salesman could tart it up and put down anything they like on the paperwork as long as the financed amount is the list price.

Grumpy_chap

That way it would cost more, because the incentive is financed all the way through.  The incentive being a deposit contribution, or upfront discount, means the incentive does not need to be financed or incur interest.

FDa65rdk

MalMonroe said:

FDa65rdk said:

daveyjp said:

They aren't free months, they are priced into the deal.

When to expect major unexpected expense depends on the vehicle in question, how it has been driven and how well it has been maintained.

The car is in good condition but I'm concerned about them saying 'We've found this, this, this and this...' and I have to take their word for it.
I don't know a great deal about cars and would not be in a position to confidently or convincingly argue with them telling that.

My car is through a PCP arrangement and I don't know a great deal about cars either but if the dealer started saying they'd found 'this, this, this and this, I'd argue with them. Because I know it's in good condition. In the agreement I signed it states that normal wear and tear is expected, and the initial price was probably arranged around that too. 

If they do start saying such things, PLEASE don't take their word for it. There's nothing to suggest they would do that, though and some car dealerships are actually honest and above-board, in my experience. DO learn to stand up for yourself, though, or people ARE going to take advantage of you. I'm a single woman in what's still, misogynistically, considered a man's world but I won't accept any nonsense from anyone. Especially when it could cost me money!

It's not a question of needing to 'learn' to stand up for myself.
I don't know much about cars and if someone says there is damage to the vehicle, I don't have the knowledge about cars to argue the point and explain why that isn't the case.
There's a big difference between that and not being able to stand up for myself.

FDa65rdk

NottinghamKnight said:

FDa65rdk said:

NottinghamKnight said:

FDa65rdk said:

macman said:

FDa65rdk said:

Grumpy_chap said:

To choose a car and take delivery in a week and 3 days seems a bit of a rush.  Or, do you just need to choose and order this month?

This is what I was told in a recent email:
'The sooner the better so that we can get you the 3 months free as to benefit from that offer the car has to be collected by 30th September. All of the cars we have offered aren't at our site yet so we would need to allow for enough time to get them here.'
So it looks like I will have to delivery by the end of the month.

This is simply an unsophisticated sales pressure technique to push you into making a rushed decision and getting a poorer deal. As others have said, there are no free months. It's costed in, and the real price would be the same now or later.

Thanks. So am I right in what I wrote in the message about the 33 payments vs 36?

Maybe, but it may be that the 3 months are simply wrapped into the deal, and there is no saving as others have pointed out.
What cars are they offering, what apr is being quoted, there's no reason to be paying hundreds of pounds a month, at a potentially high interest rate, it genuinely is money down the drain. Keep the current vehicle, save the payments you would have been making, this will form a fund for a new car when you choose to buy and/ or pay for maintenance and repairs on the current vehicle.

The strange thing is that I had the option to have paid for the car in full up front back in April 2017 but that would have actually cost more than to make the monthly payments for 42 months and then make the balloon payment.
I couldn't figure that one out.

Do you want to quote actual figures? Also details of the car involved.

I don't have the actual figures but I was willing and also intending to pay for the car upfront in order to save money in the long run but when I worked it out, the total of the monthly payments plus the balloon payments was less than the upfront cost.

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Grumpy_chap said:

That way it would cost more, because the incentive is financed all the way through.  The incentive being a deposit contribution, or upfront discount, means the incentive does not need to be financed or incur interest.

Again, win win for the finance co.

Very few people would work that out when they can't see past having a shiny new Audi for  £299 a month- and there is cash back too- Bargain!

FDa65rdk

Thanks for the responses and the advice has been to pay the balloon payment and keep the car which I was leaning towards doing but wanted an objective point of view.
Is is worth considering going to WBAC before making the balloon payment, finding out how much they would offer and if turns out to be over £1000 than the balloon payment, selling the car to them, pocketing the difference and then looking for a new car?

I've had one experience with them before where they valued an old car that I needed to sell asap and it wasn't a good one.

I don't know if this is still the case but at the time, there was a £50 fee for cars valued at £100 or more.
They valued the car at £105 which meant I got £55 for it.
If they had valued it at £99, I would have got £99.
This seemed grossly unfair where a tiered fee would have been the proper thing to do.

FDa65rdk

macman said:

FDa65rdk said:

Grumpy_chap said:

To choose a car and take delivery in a week and 3 days seems a bit of a rush.  Or, do you just need to choose and order this month?

This is what I was told in a recent email:
'The sooner the better so that we can get you the 3 months free as to benefit from that offer the car has to be collected by 30th September. All of the cars we have offered aren't at our site yet so we would need to allow for enough time to get them here.'
So it looks like I will have to delivery by the end of the month.

This is simply an unsophisticated sales pressure technique to push you into making a rushed decision and getting a poorer deal. As others have said, there are no free months. It's costed in, and the real price would be the same now or later.

Just out of interest, how do you know that the '3 months free' amounts to the same thing in the end?
I'm not doubting this at all but I'm interested where you found this out.

Grumpy_chap

facade said:

Grumpy_chap said:

That way it would cost more, because the incentive is financed all the way through.  The incentive being a deposit contribution, or upfront discount, means the incentive does not need to be financed or incur interest.

Again, win win for the finance co.

Very few people would work that out when they can't see past having a shiny new Audi for  £299 a month- and there is cash back too- Bargain!

Yes, but not the consumer.
The real win for the consumer would be if they understood that a £50k car costs more than £299 monthly and they cannot afford it. 
It would save so many people from so much heartache.  
People need to understand that a £50k car, assuming a £5k deposit and over 3 (EDIT 4) years at competitive interest is going to cost them £1k monthly, or they could have a house instead!